Wayfair Q4 loss widens as annual loss hits $1.2 billion

Wayfair ended its fiscal year on a down note, with a decline in sales, active customers and orders delivered.

The online home furnishings giant posted a net loss of $351 million, with a loss per share of $3.26, for the quarter ended Dec.31, compared with a loss of $202 million, $1.92 per share, in the year-ago quarter. On an adjusted basis, Wayfair lost $1.71 per share,  more than the  $1.62 per share analysts expected.

For the full year, Wayfair reported a net loss of $1.3 billion compared with a loss of $131 million in 2021.The loss per share for the year was $12.54 compared with $1.26 last year.

The company’s  fourth-quarter net revenue fell 4.6% to $3.1 billion. Orders delivered totaled 11.0 million, a decrease of 9.1% year-over-year. On a more positive note, average order value for the quarter was $283, up from $269 for the fourth quarter of 2021.

Wayfair’s active customer base totaled 22.1 million in the fourth quarter, a decrease of 19.0% year-over-year.

During the fourth quarter, the company’s advertising expenses rose by 18% to $406 million, representing about 13% of total revenue. For the full year, advertising spend grew 7%  to $1.5 billion.

For the full year, Wayfair’s total net revenue was $12.2 billion,  down 10.9% year-over-year. U.S. net revenue came in at $10.5 billion, down 7.0% year-over- year.

Earlier this year, announced plans to lay off approximately 1,750 employees — representing 10% of its global workforce as of the end of 2022 —as part of its previously announced cost-cutting plan. Wayfair expects to save $750 million a year from the job cuts, including cash and stock-based compensation.

Niraj Shah, CEO, co-founder and co-chairman of Wayfair, struck a positive note in the company’s earnings release.

"We enter 2023 as a lean, focused team driven by the same key priorities that defined much of 2022 - driving cost efficiency, nailing the basics, and earning customer and supplier loyalty every day,” he said. Although the short-term macroeconomic picture is unpredictable, we are confident in our ability to navigate its challenges and are reiterating our commitment to quickly reaching adjusted EBITDA profitability and then to positive free cash flow."

Based in Boston, the company’s brand portfolio includes Wayfair, Joss & Main, AllModern, Birch Lane, Perigold and Wayfair Professional.